Michael Lynton is stepping down as chief executive of Sony Entertainment to become chairman of Snap, the owner of messaging start-up Snapchat that is heading towards an initial public offering this year with a likely valuation of about $25bn.
Mr Lynton has had a long friendship with Evan Spiegel, Snapchat’s founder, and was also an early investor in the company. “I have been involved with Evan and Snapchat since its early days, and given its growth since then decided the time was right to transition and focus on my role as chairman,” he said.
Mr Lynton, who worked for Disney, AOL and Pearson before joining Sony, will not be immediately replaced at Sony Entertainment, the home of Sony’s movie and television studio and music company. The Japanese group said he would stay on for up to six months as co-chief executive, sharing responsibilities with Kaz Hirai, Sony’s chief executive, until a successor is found.
Sony has been dogged by speculation that it may sell its movie and television studio but Mr Hirai said the company’s entertainment businesses were “essential parts of Sony”, adding: “I look forward to working with Michael towards a smooth transition”.
It is unclear who will succeed Mr Lynton but internal and external candidates will be considered. These are likely to include Tom Staggs, the former chief operating officer of Walt Disney and Jim Gianopulos, the former chief executive of 20th Century Fox.
Under Mr Lynton Sony released acclaimed movies such as American Hustle, Captain Phillips, The Social Network and Skyfall, as well as hit television series such as Breaking Bad and The Blacklist. The studio has had a tough 12 months with few movie hits to speak of but has higher hopes for 2017 with a new Spider-Man set for release.
Mr Lynton’s 13-year tenure with Sony was rocked in 2014 by a cyber hack. Thousands of emails and personnel details were leaked on the internet, which the US government blamed on North Korea.
Snap is preparing to go public as early as March at a valuation of up to $25bn, according to people familiar with the arrangements. Mr Lynton’s connection with the company came about through his wife Jamie, who contacted the Snapchat founder after watching her children use the service.
“What’s interesting about the connection between Mike and Evan is Mike has had 30 years of experience in all these different businesses, whether it’s publishing or AOL or Sony,” said Steve Burke, chief executive of NBCUniversal and a longtime friend of Mr Lynton. “Evan has done a remarkable job with Snapchat. With the IPO the company is going to evolve so having Mike around is going to be great.”
Snap, which is based in Los Angeles, has already filed the first paperwork for an IPO in private, which it is allowed to do under the JOBS act because it has revenue of less than $1bn. E-Marketer, the researcher firm, forecasts it will generate revenue of just under $1bn in 2017.
Snap, which counts Benchmark, Kleiner Perkins, Fidelity and Alibaba among its investors, is led by 26-year-old Mr Spiegel.
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